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Small Business Valuation Calculator

A simple valuation built for owner-operated businesses. Enter your revenue, profit and owner pay to estimate what your small business could be worth — and see what could push that number higher.

Written by the CalcBundle Research & Editorial Team · Reviewed by the Quality Review Team · Transparent formulas · results are estimates, not advice. · Updated

Your business
Financials

Total sales over the last year.

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Net profit. Leave blank to use revenue minus expenses.

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Salary and perks you take from the business (added back to SDE).

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$
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Estimated business value

Enter your annual revenue and profit (or owner pay) to estimate a value.

What could increase your business value?

  • Grow recurring revenue (subscriptions, retainers, contracts).
  • Reduce owner dependency by documenting processes and delegating.
  • Improve margins by cutting low-value costs and raising prices.
  • Diversify your customer base so no client dominates revenue.
  • Show consistent, profitable growth over several years.
  • Keep clean, up-to-date financial records buyers can trust.

Quick Answer

How is a small business valued?

Small businesses are typically valued using Seller's Discretionary Earnings (SDE) — the total financial benefit to a single owner-operator. SDE = Net profit + Owner's salary + Depreciation/Amortization + Discretionary perks. A market multiple, typically 1.5–3.5× SDE, is then applied based on industry, growth, and risk. A business with $200,000 SDE at a 2.5× multiple is worth $500,000. Revenue multiples (0.3–1.5× annual revenue) apply when earnings are low or the business is pre-profit; EBITDA multiples (3–6×) suit businesses above roughly $1 million EBITDA. Key value drivers are recurring revenue, low customer concentration, documented systems, and low owner dependency — each reduces perceived risk and supports a higher multiple. Unlike large companies priced on EBITDA, small businesses are almost always valued on SDE because it captures what the owner actually takes home. This calculator blends SDE, EBITDA, and revenue approaches with industry benchmarks to produce an estimated valuation range.

What is the small business valuation calculator?

This calculator estimates the value of a small, owner-run business using the metric buyers care about most: Seller's Discretionary Earnings (SDE). It is a simpler companion to our full business valuation calculator, focused on the way main-street businesses actually change hands.

How does it work?

You enter your annual revenue, profit, owner compensation and a few risk indicators. The calculator then:

  1. Calculates SDE as net profit plus owner compensation.
  2. Estimates EBITDA as a conservative proxy from your profit.
  3. Applies industry low/mid/high multiples to SDE, revenue and EBITDA.
  4. Blends these, weighting SDE most heavily, and adjusts for growth, business age and team size.
  5. Adds cash and subtracts debt to reach an equity value range.

How is the result calculated?

  • SDE = Net profit + Owner compensation
  • SDE valuation = SDE × industry SDE multiple
  • Value range = blended valuation × growth & risk factors + cash − debt

Example

A retail shop earns $400,000 in revenue with $60,000 net profit and pays the owner $50,000. SDE is $110,000. Applying a typical retail SDE multiple and blending in revenue and EBITDA checks produces a typical value in the low-to-mid six figures, shown as a low, typical and high range so you can see the spread rather than a single point estimate.

What could increase your business value?

The calculator highlights the biggest levers directly in the results. In practice, buyers pay more for businesses with recurring revenue, lower owner dependency, stronger margins, a diversified customer base, steady growth and clean, documented financials. Improving even one or two of these before a sale can meaningfully raise your multiple.

Who should use it?

  • Owners of shops, agencies, trades, clinics and service businesses considering a sale.
  • Buyers evaluating a small business acquisition.
  • Anyone who wants a plain-English sense of what their business is worth.

Limitations

This is an estimate, not an appraisal. It does not value specific assets, leases, inventory or goodwill in detail, and it cannot read current buyer demand in your local market. Use it to understand the drivers of value, then get a professional valuation before you list or negotiate.

Frequently asked questions

How is a small business valued?

Most small, owner-operated businesses are valued as a multiple of SDE (Seller's Discretionary Earnings) — your net profit plus the owner's salary and perks. This calculator estimates SDE, applies an industry SDE multiple, cross-checks it against revenue and EBITDA multiples, and blends them into a typical value range.

What multiple do small businesses sell for?

It varies by industry, but many small businesses trade for roughly 2x to 4x SDE. Higher multiples go to businesses with recurring revenue, low owner dependency, strong margins and a diversified customer base. The calculator uses industry-specific ranges rather than a single number.

Does the owner's salary affect the valuation?

Yes. Owner compensation is added back to profit to calculate SDE, because a new owner could choose to run the business themselves or replace that role. A higher owner salary generally increases SDE and therefore the SDE-based valuation.

Why does owner dependency lower the value?

If a business relies heavily on the current owner's relationships or day-to-day involvement, it is riskier for a buyer and harder to transfer. Businesses with documented processes and a capable team are worth more because they can run without the founder.

How can I increase my small business's value before selling?

The most effective moves reduce the risk a buyer perceives. Diversify your customer base so no single client dominates revenue; document your processes so the business does not live in your head; build recurring or repeat revenue for predictability; and clean up your financial records so earnings and add-backs are easy to verify. Reducing your own day-to-day involvement is especially powerful, because a business that runs without the owner transfers more easily and earns a higher multiple. Starting a year or two before a sale gives these changes time to show up in the numbers.

How long does it take to sell a small business?

It commonly takes several months to a year or more, and the process is rarely quick. Finding a serious, qualified buyer, agreeing terms, arranging financing and completing due diligence all take time, and well-prepared businesses with clean records and low owner dependency tend to sell faster and closer to the asking price. Because the timeline is long, it is wise to prepare well ahead — improving the value drivers and organising financials before you ever list.

Related calculators

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Business Profit

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Break-Even

Find the units and revenue you need to cover costs and reach a target profit.

Sources & methodology

Formula
Value = SDE × Industry Multiple; SDE = Net Income + Owner Salary + Depreciation + Amortization + Discretionary Add-backs; Equity Value = Enterprise Value + Cash − Debt
Reviewed
September 2026

Primary sources

Calculation methodology is documented on our methodology page. Reviewed by the CalcBundle Quality Review Team.

Disclaimer. This calculator provides estimates for informational purposes only. Results are based on the information you enter and the assumptions used by the calculator. Actual financial, tax, business valuation, lending, marketplace or investment outcomes may differ. Consider consulting a qualified professional for decisions involving significant amounts of money. Small business sale prices vary widely with buyer demand, deal terms and financing. Actual market value may differ.